Michigan State of State doesn't rate with Republicans

Local lawmakers concerned about Granholm's plan to increase taxes.

Local lawmakers concerned about Granholm's plan to increase taxes.

February 08, 2007|LOU MUMFORD Tribune Staff Writer

As might be expected, Republican lawmakers representing southwestern Michigan weren't exactly doing handsprings Wednesday over Democratic Gov. Jennifer Granholm's State of the State address. State Sen. Ron Jelinek, R-Three Oaks, was even more reserved after details of Granholm's budget-balancing plans were revealed. The governor will formally unveil her proposals today. Jelinek said not only are state lawmakers faced with making up an $800 million budget shortfall this year but Granholm plans to increase state spending by $1 billion. She would make up those revenues by imposing a 2 percent service tax that would apply to "just about everything you do," Jelinek said. "When you get your hair cut, when you get your lawn mowed ... when you go to a CPA, you'd pay a 2 percent service tax," he said. "That would include entertainment, so when you get a ticket to the movies you'd pay the service tax. ... You'd also pay it when you get your car worked on." Jelinek said the governor hopes, too, to resurrect Michigan's estate tax, raise taxes on cigarette, tobacco and liquor sales and alter the funding mechanism for the school retirement system. But he said Michigan residents will probably like the governor's plans to boost car sales by changing the state's view on purchase costs. Currently, he said if someone buys a $40,000 car and has a $20,000 trade-in, he still pays sales tax on the $40,000 figure. Granholm would like to make only the $20,000 difference subject to the sales tax, Jelinek said. He argued the benefit, in his view, doesn't justify the proposed tax increases. "You're trying to fix a problem by increasing government spending by $1 billion," Jelinek said. "I don't think that'll fly very high" in the GOP-controlled Senate. On the House side, state Reps. Neal Nitz, R-Baroda, and Rick Shaffer, R-Three Rivers, both took shots at Granholm's tax hike proposals. "Taxing our way out of the current budget crisis is not a permanent fix. We need to focus on reforming government bureaucracy to create a smaller, more efficient government," Shaffer said. Nitz said he believes state residents are paying enough taxes already. "I do not believe the best way to solve our budget crisis is raising taxes. We need to work with the governor to get Michigan back on track without increasing the burden on Michigan residents," he said. Although state Rep. John Proos, R-St. Joseph, was among lawmakers calling for a bipartisan approach to balance the budget, he hinted he, too, has doubts about raising taxes. "Tough times demand tough choices, yet above all we must respect the hard-earned money of Michigan's residents," he said. Staff writer Lou Mumford: lmumford@sbtinfo.com (269) 687-7002